Facilitating Smallholder Farmers’ Market Access

In the OIC Member Countries

INTRODUCTION

This study, “Facilitating Smallholder Farmers’ Market Access in OIC Member Countries,”

has been prepared for the 4

Meeting of the Standing Committee for Economic and

Commercial Cooperation (COMCEC) Agriculture Working Group on September 25, 2014.

COMCEC aims to enhance cooperation among OIC member countries by sharing

experiences and good practices as well as developing a common understanding and

approximating policies among the Member States. Agriculture is one of the six cooperation

areas identified in the COMCEC Strategy.

By contributing significantly to national economic growth as well as rural employment,

agriculture occupies an important place in economic development, especially among the

least developed and developing OIC member countries. About 54 percent of the population

in OIC member countries lives in rural areas, and most of the rural population depends

upon agriculture for their livelihoods. In this regard, agriculture is not just a means of

producing food; it is also a very important means of broad-based income generation for

many member countries

Across OIC member countries, a process of structural transformation is unfolding. The

urban population in member countries almost doubled in the last two decades, rising from

349 million to 664 million. As the share of the rural population declines in almost every

member country, labor is moving from agriculture to other sectors. Agricultural output

and incomes are on the rise, even as agriculture becomes less predominant in the

economy as a whole. Only about 25 percent of OIC member countries have economies that

are still based on agriculture (economies in which agriculture accounts for more than 30

percent of GDP and over 50 percent of employment). Another 34 percent are beginning

the transition to a more urban and less agricultural economy. The remaining 41 percent

are either urbanizing or urban

The effects of structural transformation are rippling through food markets. The

composition of food demand is changing rapidly as per capita incomes rise and

urbanization intensifies. Across OIC member countries, as in the rest of the world, agri-

food value chains are transforming and modernizing to meet this increased urban

demand. The pace and extent to which agri-food value chains are transforming varies

according to where countries are in the process of structural transformation, commodity

characteristics, and the types of markets that are being supplied. What do these trends

mean for the region’s relatively large number of smallholder farmers? That question is

significant for OIC member countries, as rural areas have a higher incidence of poverty,

and a disproportionate share of poor people derive their incomes from agriculture. More

efficient and inclusive agricultural value chains are important not only for smallholder

farmers but for the urban poor, who stand to benefit from lower food prices.

World Bank (2014h).

Authors, based on World Bank, forthcoming.